Top 5 Land Deal Exit Strategies
Profitable land deals typically have a solid exit strategy in mind prior to getting under contract.
Land Intelligence breaks down our top 5 recommended exit strategies.
1. Wholesale Land Flip
Land flipping can be a great profit-making business model for those willing to take the time to find the right deal. The key to land flipping is finding deals where you buy parcels between 5-30% of market value and sell between 50%-80% of market value. Mailer campaigns and tax sale strategies are common areas of focus for land flippers.
2. Entitle and flip to builder
For developers looking to take on a little more risk for more reward, a sound exit strategy is developing the land to entitlement and finding a buyer to build such as a home builder. To be successful, you need to do the market research and understand what is driving the market. Once you figure this out, along with the right location, you can plan your development project catered to a target rich audience to maximize your returns in the shortest amount of time.
3. Build and sell
For those with access to suitable capital and willing and able to tackle longer projects, developing land with the intent to build and sell, such as building single family residential, can result in large returns.
4. Build and manage asset
Managing property assets isn’t exactly an exit strategy but it does require starting with having the end in mind. In the current market, multifamily residential, active adult, or affordable housing is a sound strategy for long term wealth.
5. Land banker
Don’t overlook the investor as an exit strategy. Access to additional capital through investors offer flexibility and can help de-risk your financial situation and may allow you to do more deals.